Hi folks. Bob Hertzog started a good conversation earlier this week on his article....
Attn: Short Sale Listing Agents...READ YOUR LENDER APPROVAL LETTERS BEFORE CALLING ME WITH THE "GREAT NEWS"!!
Some how the comments made it around to commissions. One of the responders stated:
- "...because it is the investor and/or pmi (mortgage insurance) who determines who gets what and how much."
And of course since this is dealing with Short Sales and how we get paid I just had to chime in.....
The above statement is not correct. Our listing agreement with the seller determines how much we get paid and how much of a co-broke we are offering selling agents. The listing agreement is between the seller and the broker. The lender/investor/sevicer/MI company (let's call them lender for simplicities sake) have ZERO say so in this agreement.
Based on contract law and and anti trust laws these entities CANNOT dictate how much I charge for my services. Commission is 100% between the seller and their broker.
This is a fact that agents need to understand.
Now having said that, the lender, can dictate how much of the commission they are willing to accept in their loss. Their loss is the portion of the commission that they will allow to be paid out of the proceeds of the sale. This however does not release the seller from paying the commission as per the term of the listing agreement. We may choose to accept this as full compensation but it is our choice NOT the lenders.
The seller can pay us additional compensation from their pocket NOT the lenders pocket. This can show up as a POC (paid outside of closing) on the HUD. The seller can also sign a note for the commission owed and pay it off over time. They can pay at time of listing***. The buyer can pay a portion of the commission on the HUD. There are many ways to get paid.
OR...we can choose to be at the mercy of the lender. Personally I choose to control my own business. I do not bend over for lenders just because they say this is how we are to do things. But of course this is just my opinion. What's yours?
***Please check your State's laws about advance fees and short sales.
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